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08/02/2013

SEC targets Greentech, company founded by Terry McAuliffe

The Washington Post's Ben Pershing has the scoop. The Securities and Exchange Commission is investigating Greentech, the green car company founded by Terry McAuliffe, the Democratic nominee for Governor of Virginia.

An electric-car company co-founded by Virginia gubernatorial candidate Terry McAuliffe (D) is under investigation by the Securities and Exchange Commission over its conduct in soliciting foreign investors, according to law-enforcement documents and company officials.
The SEC subpoenaed documents in May from GreenTech Automotive and bank records from a sister company, Gulf Coast Funds Management of McLean.

The investigation is focused, at least in part, on alleged claims that the company “guarantees returns” to the investors, according to government documents.
GreenTech has sought overseas investors through a federal program that allows foreigners to gain special visas if they contribute at least $500,000 to create U.S. jobs.

Gulf Coast, which is run by Anthony Rodham, the brother of former secretary of state Hillary Rodham Clinton, seeks investors for GreenTech and arranges the visas.
In recent months, the SEC has stepped up its scrutiny of companies that use the visa program, largely over concerns that investors may have been misled or defrauded by the companies seeking their money.

The visa program has also raised national security concerns from some lawmakers, who are worried that suspect individuals are using it to gain entry into the country.
The full focus of the SEC investigation into GreenTech and Gulf Coast is not known, and officials from the SEC declined to comment.

Greentech was once thought to be a major advantage for McAuliffe. The candidate had hoped it would display his ability to build a business and create jobs quickly. But the company's sluggish rollout has led to expectations that were far short of McAuliffe's initial promise.

In addition to the company's slow start, one of their funding arms is a part of an investigation by the Department of Homeland Security and now Greentech itself is the target of a probe by the SEC.

NBC12 has done an extensive series of reports on Greentech and its role in the campaign for governor. You can the complete series by clicking here.

McAuliffe left quietly left Greentech at the end of 2012 and his spokesman said today that he is not connected to the SEC investigation.

"Terry left GreenTech in early December
2012 and has no knowledge of any investigation," said Josh Schwerin.

"Terry McAuliffe made it always very clear to the management
here and myself included that if he decided to run for Governor that he would
remove himself from regular activities with the company," said Greentech spokesperson Marianne
McInerney.

McInerney confirmed to NBC12 that the company has been contacted by SEC investigators.

“GreenTech Automotive has received a document subpoena from the U.S.
Securities and Exchange Commission and is cooperating fully with the SEC
staff,” she said in a prepared statement.

Meanwhile McAuliffe's opponent, Attorney General Ken Cuccinelli (R) personally responded to the new report of an SEC investigation.

"Instead
of coming forward and addressing this matter head on, McAuliffe has refused to
provide Virginians answers on a list of questions that is only growing longer
and more serious by the day," said Cuccinelli in a prepared statement. "In light of the latest revelations, I am once
again calling on my opponent to step forward and answer questions regarding his
efforts to secure visas for foreign investors, some of whom reportedly were a
threat to our nation’s security, the ongoing Securities and Exchange Commission
investigation and his continued refusal to release his tax returns
demonstrating how much compensation he received from GreenTech Automotive.
Virginians deserve answers and deserve them right now.”